Question: What’s the point of having an ETF if you already have a strong and well diversified portfolio?

Frits Van de Klok: It could save time on reading up on your companies. If you are still in the purchasing fase it could save you on transaction fees. It could be easier to purchase funds you have no clue about like emerging markets or China maybe.

Jeffrey Smiley: If u have a diversified portfolio, I wouldn’t want an etf. Etfs are pretty much a mutual fund anyways!

Kevin Shotwell: 90% (if not higher) of the investors out there don’t beat the S and P index. To include a lot of your professional managers. That’s why it is smart to invest money into certain ETFs.

Kevin Shotwell: I’m not a fan of them but in a bear market I could see people playing that way.

Michael Morse: Kevin ShotwellI’ve owned both at the same time and know for a fact that they don’t operate the way the market thinks they should. When a long etf and it’s opposite both have green days….something is a miss?

Milos Markovic: Because people are trying to time the market. We are in a long term contest here. I belive that a well diversified strong dividend portfolio in 10-15 years will always beat the market. One example is the graph bellow. Immagine starting with 2.8% dividend yield and than find yourself with 10-12% yield on cost after 10 years….

Kevin Shotwell: 90% of investors don’t beat the market. Good investors do, but there are very few that do. Warren Buffet has talked about this at length. Some of the greatest investors to include a lot of 401ks don’t beat the major indexes.

Helen Sriubiskis: Milos Markovic I get your point, but there are few companies that raise their dividend at such a high percentage as BA. https://dividendhistory.org/payout/BA/

Dividend History
dividendhistory.org

Sam Smith: Tax efficiency…..low expense…similar to index funds…

David Ou: Some people aren’t interested in finances but still want to invest. And some people who want in on all the big companies but only small amounts to invest at a time.

David Ou: Most people I know that go with etf and funds aren’t that ocd about 7% or 10% or market return. They should. But most aren’t interested enough about finance, to take time examining difference as long as their money grows over time and expense low. Investing isn’t that interesting or exciting to everyone.

Peder Steen Jensen: One use I’ve found, is in gaining exposure to a sector of which you don’t have much knowledge. E.g. I’m pretty certain robotics and industrial automation will be enormous growth sectors in the coming years. But I have neither the knowledge nor the time to acquire it, to make solid investment decisions in the space. Here a few concept etf’s comes in handy.

Michael David Lewis: This notion that the S&P is the way to go only works if you have enough time. For a older investor to put a large bet on the S&P now with valuations high is asking for trouble. I will stick to my dividend stocks that went through the Great Recession growing their dividend. Income is what’s most important at this age.

Sam Smith: Agree…i might buy indexes in increments…but all investments should be left alone for about 5 years if possible..

Bill Degnan: Ability to target a market basket that acts like a stock. ETFs may allow you to plug a hole in your portfolio with a bit more precision than a fund. Finally NO CAP GAINS AT YEAR END!!! Projecting cap gains can be an issue for people (like myself) who need to pay estimated tax.

Catherine Haggerty: Also for someone on limited funds you can actually own some shares of stocks that you want to own but cannot afford them.

Tomáš Lysák: Funds have a power to buy cheaper sell more expensive …., no stress no worries

Voorzichtige Belegger: It add’s nothing. As a friend of mine said, with ETF’s you also buy the shit.

Greg Williamson: If you are interested in investing in a particular sector, market size, country, or idea, one way to do so is an ETF. For example if you want to invest in Brazil without taking a risk on a particular stock, go with EWZ. Emerging Markets go with EEM. Tech – QQQ. Blue chips DIA